Integrated textiles company Alok Industries plans to shut 45 non-profitable stores of its domestic retail business ‘H&A’, Chief Financial Officer Sunil Khandewal said here on Thursday. The company is looking at ways to exit its UK retail chain business and is also selling real estate to reduce debt.
“We’ve decided we will close about 45 non-profitable stores by September. Then, we will see the performance of the division. If it continues to be profitable, we would continue that business; else, we’ll gradually start unfolding it,” said Khandewal.
Currently, the company has 190 exclusive brand outlets, and the same number of shop-in-shops. Alok Industries is also looking at how to exit ‘Store 21’, its retail chain in the UK, in about a year. The Store 21 chain saw its earnings before interest, tax, depreciation and amortisation fall to £4 million (Rs 34.7 crore) for the quarter ended June.
As on June 30, Alok Industries’ debt stood at Rs 12,900 crore and to reduce this, it plans to sell non-core assets (land) worth Rs 1,500 crore this year. The company also plans to sell office space.
Q1 net dips 49%
The company reported a 49 per cent fall in its net profit at Rs 30.1 crore for the quarter ended June, compared with Rs 59 crore in the same period last year. Net sales rose 48 per cent to Rs 2,422.7 crore, compared with Rs 1,638.2 crore in the year-ago period. Exports rose 33.6 per cent to Rs 836.6 crore, against Rs 626.3 crore in the corresponding period last year, due to depreciation in the rupee and higher volumes. “The company’s order books are full, and the export market is looking extremely good,” said Khandelwal.
